The job market continued its pleasantly healthy growth streak in February, as payrolls increased by 295,000 and unemployment fell to 5.5 percent, according to the Bureau of Labor Statistics. Here’s the long-term picture:

Jordan Weissmann

But at this point, the big news in the jobs report isn’t really about jobs anymore. It’s about wages. And on that front, the news was seemingly more mixed. Over the year, hourly pay is up 2 percent, which is typically considered low. While retailers like Walmart and TJX have recently made headlines after announcing they would hike pay for their workers during the coming months, it still seems like American workers are still broadly waiting for a raise.

Or are they? In general, 2 percent wage growth is considered low because it’s right around the inflation rate (or at least, the Federal Reserve’s ideal inflation target). But, thanks to the welcome return of cheap oil and gasoline, prices have have been dropping recently. Over the 12 months ending in January, the consumer price index actually fell 0.1 percent. If you take food and energy out of the math, the result changes a bit—so-called core inflation is up 1.6 percent. But that number matters more for monetary policymakers. For consumers, putting a meal on the table and filling up the family car are major budget items. Those expenses have become cheaper, meaning that families feel richer, and on top of that, they’ve gotten a 2 percent raise.

It’s a little harder to tell exactly what those pay hikes say about the strength of the labor market. When employers set pay, they aren’t necessarily just thinking about the inflation rate. They’re just trying to compete with other businesses for decent workers. Two percent wage growth doesn’t seem like a sign that managers are getting desperate in their search for talent. But the fact that pay is growing faster than other expenses at least suggests companies are feeling some pressure to compete.

Wage growth has also varied a great deal by industry. Aside from the information business, over the past year it’s been fastest in low-pay sectors like retail and leisure and hospitality, while in some higher-pay corners of the economy, like manufacturing, it has been quite a bit slower. My guess is that may have to do with recent state-level minimum-wage increases, and would explain partly why companies like Walmart are moving ahead on compensation. If state minimums are playing a major role, that would suggest the labor market isn’t actually super-tight.

Jordan Weissmann

Again, the reason wages matter so much right now (aside from the fact that we all like rising living standards) is that the Federal Reserve is on high alert for any signs of coming inflation, and quickly rising pay would be a telltale sign. If it comes, the central bank will likely raise rates and cool off the economy, trimming those rosy jobs numbers we’ve gotten used to. But as of right now, the wage picture is mixed, and as for actual inflation—well, that seems a very long way away.